Cure v Bridge Housing Ltd

NCAT Appeal Panel|2014-11-11

Introduction 1In this appeal matter, the Appellant (the Tenant) seeks to appeal on a question of law relating to the decision at first instance to order that his residential tenancy agreement be terminated. He needs an extension of time to do so. 2The question of law concerns the power of the Tribunal under s 90(1) of the Residential Tenancy Act 2010 (RTA) to terminate a tenancy agreement where the tenant has: Intentionally or recklessly caused ... (a) serious damage to the residential premises or any neighbouring property ... 3The whole of s 90(1) of the RTA states: (1) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the residential premises, has intentionally or recklessly caused or permitted: (a) serious damage to the residential premises or any neighbouring property (including any property available for use by the tenant in common with others), or (b) injury to the landlord, the landlord's agent, an employee or contractor of the landlord or the landlord's agent, or an occupier or person on neighbouring property or premises used in common with the tenant. 4 The Tribunal at first instance found: In my view s90 does not require that it was the deliberate intention or reckless result to cause damage. It also applies where the person is alleged to have deliberately or recklessly undertaken the actions that caused the damage. In this case, it is accepted that the tenant deliberately undertook major excavation and other works in this backyard which has had the effect of causing serious damage to the applicant's property and the two neighbouring properties resulting and (sic) significant expense and repair. 5The Appellant contends that in so finding the Tribunal made an error of law.

The facts 7The property leased is a terraced house in Redfern. The lease commenced in August 2011. 8The Respondent (Bridge Housing) is a not-for-profit community housing provider. 9The Appellant has lived in the Redfern area for many years. Because of his medical condition, which has caused brain damage as a result of major epileptic fits, he needs to remain in the Redfern area where he has family and a support network. 10The Tribunal member at first instance said: ...towards the end of 2013, the respondent decided to undertake "excavation works" in the back yard of this terrace property, consisting of substantially lowering the ground level of a significant proportion of the back yard and relaying brick pavers to form a hard surface. The works undertaken by the respondent significantly damaged, so the applicant claims, the subject premises and also caused significant damage to No. 17 and No. 21, including blocking storm water drains, causing mud to flow into their premises, damaging the dividing fences and either removing or causing the necessity to remove, a retaining wall or walls. The respondent agrees he did these works but states that his intention was to improve his premises and also to improve his neighbour's premises. 11Later in his reasons, the Tribunal member found that serious damage to the leased premises and the two neighbouring properties was caused by these works. What the Tribunal regarded as "damage" to the residential premises and how it occurred was not precisely identified. 12Whilst the reasons at first instance indicate that the timing of these works commenced towards the end of 2013, it appears from the submissions of the parties to the Appeal Panel that it is undisputed that the works commenced in January 2013 and continued to, at least, May 2014 (some of the works, therefore, occurred after the hearing at first instance on 20 March 2014). 13It is common ground that these works were carried out without the consent of Bridge Housing. 14Clearly, the works effected a substantial alteration to the premises and were carried out over a lengthy period of time. 15Bridge Housing did not, however, apply for termination based upon breach of the term of the tenancy agreement prohibiting renovation, alteration or addition to the premises without the consent of the landlord: s66 and s87 of the RTA. Different considerations are there applicable. For example, notice of termination is required and in considering the power to terminate under s87 the Tribunal may take into account any steps taken by the tenant to remedy the breach and may refuse to make a termination order if it is satisfied the tenant has remedied the breach. Also, where social housing is involved the Tribunal is required to have regard to such of the matters in s 152(1) as are relevant. 16There was background to the Appellant's decision to carry out these works. It seems that there had been storm water runoff and rising damp issues at the premises. In his reasons, the Tribunal member referred to the fact that inspections had taken place but no action had been taken to do substantial works, presumably, action needed by the landlord, although there was a dispute as to whether the Appellant had permitted access for this purpose.

Key conclusions at first instance 17The key conclusions at first instance were those set out above in paragraph 4. 18As troubling as this state of affairs is for the landlord and the neighbouring properties, nevertheless, but consistent with this construction of the provision: (1)no finding was made rejecting the Appellant's evidence that his intention was to improve the leased premises (and those of his neighbours); (2)no findings were made as to what the Appellant intended, expected or foresaw in carrying out the works; (3)no finding was made that serious damage was recklessly caused.

Extension of time 19The application for an extension of time is opposed by Bridge Housing. 20The Notice of Appeal was lodged on 20 May 2014. On the basis that the Appellant received the reasons for decision at first instance on 9 April 2014 (see Appellant's Submissions for Rehearing dated 17 April 2014, page 1), the Appellant was just under four weeks late in lodging the appeal. Because it involves a decision in residential proceedings, the appeal had to be lodged within 14 days from notification of the decision or of reasons (whichever is the later): Rule 25(4). 21The Appellant, promptly, decided to challenge the decision at first instance but the wrong procedure was chosen. The Appellant applied to the Tribunal for a re-hearing, apparently, on the grounds of new evidence. This application was dismissed on 15 May 2014. Shortly after that dismissal, the appeal was lodged. 22The Appellant also says that he did not, at first, appreciate that an appeal on a question of law could be made to the Appeal Panel rather than by appeal to the Supreme Court. He considered the latter would be prohibitively expensive. 23In Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22, the Appeal Panel set out the law to be applied in relation to applications for an extension of time in which to appeal. 24Generally, time limits should be strictly enforced but there are exceptions to be made in the interests of justice. In our view, this matter is one of those exceptions. 25This is so, in view of: (1)the importance of the question of construction of s 90(1) of the RTA raised by the appeal; (2)the substantial prospects that the Appellant has on this point of construction going beyond what is a fairly arguable case (as to which see reasons below); (3)the absence of any specific prejudice relied upon by Bridge Housing; (4)the length of delay, which is considerable but not excessive, and for which an explanation has been provided. 26Accordingly, the Appellant should be granted an extension of time in which to lodge this appeal.

Submissions of the parties on the appeal 27The Appellant relied upon the following dictionary definitions of intention: The Macquarie Dictionary - Intention: "1. The act of determining mentally upon some action or result; a purpose or design; 2. The end or object intended". Intentional: "1. Done with the intention or on purpose." The Concise Oxford Dictionary - Intention: "1. An aim or plan;" Intentional: "Adj. deliberate." 28In addition to referring to these dictionary definitions of intention, the Appellant referred the Appeal Panel to three decisions of the Tribunal at first instance - Wong, Go v Eggins (Tenancy) [2003] NSWCTTT 535; Department of Housing v Moore [2004] NSWCTTT 277; and NSW Land and Housing v Bloomfield [2013] NSWCTTT 645. 29None of these authorities contain any relevant consideration of the meaning of the language in issue. None of the facts in these cases are analogous to the present. 30Two of the cases (Wong and Bloomfield) serve to illustrate the availability of an inference of intention to cause damage or recklessly causing damage from the whole of the evidence. In one case (Wong), this arose from the nature of the damage itself and the absence of any explanation from the tenant. In the second of these cases (Bloomfield), the inference arose from the nature of the damage to a toilet and the tenant's evidence: "I ripped the toilet bowl out" without explanation as to his reasons. 31We note that in Bloomfield the Tribunal spoke in terms of the lack of a basis for finding that the "actions were unintentional" but this was ambiguous and the Tribunal, subsequently, described the actions as "deliberately destructive": see at [38]. 32The third case (Moore) was of no or marginal relevance. 33Bridge Housing does not support the Tribunal's interpretation by reference to any language in the statute or other context. Rather, it gives an example of a tenant that causes damage to timber floor boards by unintentionally dropping a heavy bowl, knife or plate. It submits, and we agree, that such a situation would not be captured by s 90(1). The submission is made that this is because no thought process was involved, and, therefore, no intent formulated "in the dropping of the object". 34However, it does not follow from this argument that intent in the action alone, and not intention concerning the result, is all that is required. Clearly, in the example given there is no intention to damage. 35To take the example given by Bridge Housing further, one could intend to drop a bowl, a plate or a knife. One might do so, for example, in order to attract someone's attention but it is difficult to see how a person would intend to cause serious damage in taking this step. Yet, it is not inconceivable that serious damage results, for some unexpected reason. In our view, for the reasons below as to the meaning of s90(1), such a situation also would not be captured by the provision. 36In the alternative, that is, assuming the Tribunal at first instance erred in its construction of s 90(1), Bridge Housing submits that evidence of what the tenant did was sufficient to prove the requisite intent to cause damage. The action which was pointed to was that of digging a hole of at least two metres by two metres. One matter it relies upon is the Appellant's evidence, given at first instance, that his actions were misguided and that he has sought to repair the damage and return the backyard to its original condition. Another matter Bridge Housing relies upon is the cutting of a number of roots of a large liquid amber in the backyard said to have caused the tree to become unstable. As to this issue, the Appellant says it was the subject of a mediation and settlement and should not be raised against him. 37This argument and its supporting material was not addressed in the reasons at first instance. It will need to be dealt with on a reconsideration of the case by the Tribunal (see further in paragraphs 52 to 54 below). 38Nevertheless, we do not agree that the Tenant's evidence about being misguided and repair work are admissions of intent to cause damage. This evidence is consistent with the Tenant's recognition that he had no right to carry out the work. 39Again in the alternative, Bridge Housing submits that, in any event, the Tribunal's decision was based upon the Appellant having intentionally or recklessly causing damage and that it was clear that the works were both reckless and caused damage. However, as noted in paragraph 18(3), there was no finding at first instance of recklessly causing damage.

The meaning of s 90(1) 40With some repetition, we set out the complete reasoning of the Tribunal on the construction and application of the relevant part of s 90(1) of the RTA: The respondent submits that s 90 only applies to claims where it is alleged the tenant deliberately or recklessly sought to cause the damage (not necessarily with malicious intent) and is not appropriate in this case where it is submitted the respondent did not try to or recklessly cause damage, rather the damage was an unforeseen result of the actions of the respondent which were described as impulsive. I do not agree with that submission. In my view s90 does not require that it was the deliberate intention or reckless result to cause damage. It also applies where the person is alleged to have deliberately or recklessly undertaken the actions that cause the damage. In this case, it is accepted that the tenant deliberately undertook major excavation and other works in this backyard which has had the effect of causing serious damage to the applicant's property and the two neighbouring properties resulting in significant expense to repair. 41The Tribunal at first instance erred in its construction of the provision. It is causing serious damage, that is a result, and not simply the actions which led to such damage, which must be either intentional or reckless. That this is so, is plain from the language of the section. 42Serious damage caused to the residential premises or injury to the landlord (or others associated with the landlord) is an essential part, if not the focus, of the matter addressed in s 90(1). The mental or fault element (intentional or reckless) must attach to that focal point or essential part. 43In accordance with the ordinary meaning of "intentionally", in order to "intentionally" cause serious damage, a person must determine mentally upon that result or such result must be that person's aim or purpose. Such intention will not be present if causing serious damage was unforeseen. 44This is not to say that the Tenant's evidence that he carried out the works in order to improve the properties, if accepted, was a complete answer to the claim of "intentionally" causing serious damage. Clearly, it was not a complete answer to any claim of recklessly causing serious damage. 45If, despite such purpose of improvement, the Tenant was aware that his actions would cause serious damage to the premises, for example, to the retaining walls, but he determined to proceed and such serious damage resulted, then, in our view, he would have "intentionally" caused such damage. 46The language of "intentionally or recklessly" brings to mind the element of mens rea in the field of criminal law. What constitutes grounds for termination under s 90(1) may well constitute a criminal offence. For example, in NSW it is an offence to intentionally or recklessly damage property belonging to another: s 195(1) of the Crimes Act 1900 (NSW). 47In the field of criminal law, a person intends the commission of a crime where that person's aim or purpose is to bring about its constituent elements: Halsbury's Laws of Australia at [130-80]. 48Also in that field, a person is said to be reckless where that person acts with knowledge that a consequence is a probable (or in some cases possible) result of his or her actions: Halsbury's Laws of Australia at [130-85]. 49These aspects of criminal law also support our construction of the section. 50As we pointed out earlier, intentionally or recklessly causing damage can be inferred from the whole of the evidence but this is not how the Tribunal at first instance approached the matter. 51Accordingly, in our view the decision below was based upon a misconstruction of s 90(1) of the RTA.

Outcome of the Appeal 52It may be that upon a correct construction of s 90(1) inferences are available that the tenant "intentionally" or "recklessly" caused serious damage to the premises and, perhaps also, to the neighbouring properties. We express no view either way. 53The evidence needs to be re-considered in the light of the correct construction and findings made on the relevant issues. 54In the circumstances, the matter should be remitted to the Tribunal at first instance for determination according to the correct construction of the section.

Orders on appeal 55In the circumstances, the orders of the Appeal Panel are as follows: (1)An oral hearing of this appeal matter be disposed with; (2)An extension of time to 20 May 2014 be granted for the lodging of the Notice of Appeal; (3)The appeal be allowed. (4)Set aside the orders of the Tribunal at first instance made on 20 March 2014. (5)The whole of the case be reconsidered by the Tribunal, similarly constituted, in accordance with the Appeal Panel's construction of s 90(1) of the RTA and in accordance with the following directions: (a)the Respondent to this appeal file and serve any further evidence and submissions upon which it intends to rely by 21 November 2014; (b)the Appellant file and serve any evidence and submissions in reply by 19 December 2014. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 November 2014

Residential Tenancy Act 2010(NSW)

Civil and Administrative Act 2013(NSW)

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